In a First – Jail for Operator for Unfair Consumer Practice

Summary

On 9 September 2024, the managing director of Nail Palace received a four-month prison sentence for contempt of court, marking the first in Singapore’s efforts to safeguard consumers against unfair practices. In addition, two Nail Palace outlets were each fined S$15,000 for their noncompliance with judicial orders.

In 2022, these outlets were found to have misled customers by recommending unnecessary anti-fungal treatments, prompting complaints to the Consumers Association of Singapore (CASE).  Notwithstanding CASE’s involvement, the unfair practice continued. Consequently, the court declared that the outlets had engaged in unfair practices in relation to the anti-fungal treatment packages, and directed Nail Palace to publish details of the court declarations  and injunctions in four major local dailies; and specifically, for the two outlets to notify customers about the declaration and injunctions prior to any purchase, for a period of two years.  An appeal was filed against the orders, which was dismissed.

When the notice was eventually published following the unsuccessful appeal, it was a cramped one-page advertisement condensing all sixty-six pages of the court’s judgement, making it small and impossible to read. They also did not notify customers about the declaration and injuctions as required by the court.

The Competition and Consumer Commission of Singapore (CCCS) took unprecedented action by initiating contempt proceedings in November 2023, which resulted in both fines and a custodial sentence. This case represents a landmark event, being the first instance where the CCCS sought such penalties under the amended Consumer Protection (Fair Trading) Act (CPFTA) of 2016, which enhances the Commission's authority to enforce consumer rights through legal channels.